Trade Minister Muhammad Lutfi said successful vaccination programs would allow advanced and emerging economies to return to normalcy in the second and fourth quarters of the year, respectively, at the latest.

The Trade Ministry hopes exports will rebound 4.2 percent in real terms this year. Exports were down 10.82 percent year-on-year (yoy) in the third quarter of last year.

“We believe that when the vaccinations are done, the economy will start moving,” Lutfi said during a virtual press conference on Monday. “We have been able to see [recoveries] in commodities such as soybeans and corn, whose prices have started to pick up on the international market as economies like China and other developed ones have started moving.”

Read also: Indonesia books highest export value in 2 years in November as global trade recovers

Indonesia is planning to begin inoculating frontline medical workers and civil servants on Wednesday in a bid to achieve herd immunity in less than 12 months.

The country’s imports have fallen more precipitously than its exports. Indonesia booked a US$2.61 billion trade surplus in November 2020, up from a deficit of $1.40 billion in the same month the year before, and in the January to November period, the trade surplus was $19.66 billion.

The total value of exports in the January to November period last year slipped 4.22 percent from the same period in 2019, while imports plummeted 18.91 percent, Statistics Indonesia (BPS) data shows.

Center for Reform on Economics (CORE) Indonesia executive director Mohammad Faisal said on Monday that he expected to see rapid growth in exports of iron and steel this year, especially to China, following a strong recovery in the world’s second-largest economy.

The Trade Ministry has estimated that Indonesia exported about $10 billion in steel in 2020, accounting for nearly 7 percent of the nation’s total exports. By November, steel exports had reached $9.64 billion or around 6.57 percent of total exports.

Read also: [Yearender] Signed, sealed, delivered: RCEP concluded in turbulent year for global trade

Exports of commodities such as crude palm oil, coffee, cocoa and rubber are expected to grow but at a limited rate, according to Faisal.

Faisal predicted that raw materials and intermediate goods would remain the majority of Indonesia’s imports this year. But he anticipated a rise in the import of consumer goods in response to growth in e-commerce.

“For imports, the growth is expected to be less than 10 percent this year. For exports, it will be 5 percent tops,” Faisal said.

Indonesia’s trade surplus is expected to be below $10 billion this year, around half of the estimated surplus in 2020, according to Faisal.

To bolster trade, the Trade Ministry is planning to focus on concluding 11 ongoing trade negotiations this year, including with the European Union, Turkey, Pakistan, Bangladesh, Iran and Tunisia, according to Deputy Trade Minister Jerry Sambuaga.

“The largest one is the IEU-CEPA, which is entering the 10th round of negotiations, which we plan to hold in the near future,” Jerry said during the virtual press conference, referring to the Comprehensive Economic Partnership Agreement (CEPA).

Read also: Indonesia banks on RCEP for reduced uncertainty in trade

The ministry will also oversee the ratification of trade deals with the European Free Trade Association (EFTA) and Mozambique this year.

Last year, Indonesia concluded several trade negotiations, including the long-awaited Regional Comprehensive Economic Partnership (RCEP) and the CEPA with South Korea. The country also implemented its trade deal with Australia in July.

“The targets have been met and even surpassed with all the agreements that have been signed, ratified and have entered the negotiation phase,” said Jerry.

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